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Significant court case continues

Summer may be over, but the fallout from the season's most significant court case continues

On 26 July 2017, the UK Supreme Court ruled that the employment tribunal fees regime, introduced in 2013, was unlawful. The government had already undertaken that if it lost the case it would refund the fees paid over the last four years.

This decision leads to a number of unanswered questions, such as:

Refunding tribunal fees sounds simple, but how, when and to whom? and

Can claims that were rejected due to non-payment of tribunal fees now be reinstated?

Thankfully the Ministry of Justice (MoJ) has promised to provide more information during September about these matters.

I hope that what we get from the MoJ will have address the detail and provide guidance on the tricky issues discussed below that arise from the Supreme Court’s judgment.

Reclaiming fees paid

It is easy to promise that all tribunal fees will be refunded, but the majority of cases affected will have already been concluded.

To whom?

If the claimant won their case, then in most instances the losing employer would have been ordered to reimburse the claimant for the tribunal fees incurred as part of the claimant’s compensation.

If the employer has paid, then it does not seem right for the claimant to be also entitled to a refund from the government, as they have already been reimbursed by their employer.

But does this mean the employer is then entitled to claim the value of the fees from the government, even though the employer was found to have failed to comply with employment law and that the focus of the Supreme Court’s judgment was that fees impeded claimants’ access to justice?

How?

If the losing employer was ordered to reimburse the claimant but has not done so, then presumably the claimant will still be entitled to a refund from the government.

It is not clear though how the tribunal service will be able to monitor this, as it will have no record of whether the employer paid the compensation ordered against it. If the employer has not paid the compensation then what steps, if any, might a claimant need to show that they took to try to get the employer to pay before being entitled to a refund from the government?

When?

Given that tribunal fees were introduced in 2013, it seems fair to ask whether claimants will be entitled to interest on (unlawful) fees paid up to four years ago. No hint of this yet from the MoJ though.

Whatever the answers to these questions, it is going to involve a lot of administration, form filling and processing. This burden is likely to fall upon the tribunal service, which has seen resources cut back over the last four years and is likely to be dealing with an increase in the number of claims now that fees are not being charged. Do not expect things to move quickly.

Reinstatement of claims

A further tricky issue is what happens to the claims that were rejected or dismissed for non-payment of fees.

Claimants may argue that such claims should now be reinstated as the fees imposed were unlawful.

If such claims are allowed to be reinstated, then this would be incredibly challenging for the tribunal service’s resources but also for respondent employers, who legitimately considered that the claims had finished. Employers may not still have access to the written evidence and crucial witnesses may have moved on and may not be traceable or willing to co-operate with their former employer.

Another difficult question is what should happen if a claim was settled in return for a compensation payment that included an amount to reflect the tribunal fee paid.

Will the MoJ take the view that the claimant has been adequately compensated in the settlement and so not entitled to a refund? Verifying this could be very difficult as it is unlikely that many settlement agreements went into as much detail as to list precisely what the settlement payment was made up of.

Out of time claims

What the MoJ is not going to make any announcement on is whether potential claimants who were put off bringing a claim because of the fees might now be able to bring those claims, even thought the time limit for doing so has long passed.

The majority of tribunal claims must be made within three months of the act complained of.

The Employment Tribunals President issued a case management order on 18 August 2017 to confirm that such claims shall proceed to be considered judicially in accordance with the appropriate legal principles in the usual way. This means that the usual exceptions will apply to whether a claim that is submitted out of time is allowed to proceed.

This varies depending on what is being claimed. In unfair dismissal claims, the exception is based on whether it was not reasonably practicable to bring a claim within the time limit, which is a high threshold to satisfy. In discrimination claims the test is looser and it is whether it would be ‘just and equitable’ to extend the time limit.

However, claimants may be required to show that it was the fee that was the principal reason for not pursuing the claim, rather than other factors such as advice received about the prospects of success, the time and stress involved in bringing proceedings and the cost of legal advice.

Under the unfair dismissal test for reasonable practicability, it is also relevant whether the claim was made promptly once it became practical to do so. Whether it is just and equitable to allow a discrimination claim to proceed at the time will also take into account any delay in doing so on the claimant’s part.

So any potential claimants thinking of bringing out of time claims on this basis need to act quickly and take advice about submitting a claim sooner rather than later.

There is likely to be plenty of litigation over these issues over the coming years.

So, plenty to think about. Hopefully by the end of the month we will have some answers.

Previously known as a Compromise Agreement and recently renamed by the Government. When you are offered a settlement agreement you will need to take advice from an independent employment lawyer. Our employment lawyers will ensure you are properly compensated for any claims you may have.

We act for businesses of all shapes and sizes and in many different sectors. Our advice covers all aspects of the employment relationship, helping to settle disputes, defending employment tribunal claims and providing immigration compliance audits.

Senior Associate, Employment

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